Fraud Chronicles Roundup – Feb 25, 2014

Bitcoin’s Largest Exchange Shuts Down

Photographer: Kiyoshi Ota/Bloomberg
  • shutdown prompts Bitcoin damage control efforts amid rumors hackers may have stolen over $390 million in bitcoins. (, 26 Feb 2014)
  • More than 740,000 bitcoins allegedly missing from Tokyo exchange: Bitcoin exchange website Mt. Gox is offline … hundreds of millions of dollars’ worth of losses, although figures are uncertain given Bitcoin volatility.” (Feb 25, CBCNews, with Video, 25 Feb 2014)
  • Notice to Mt. Gox users posted on
  • The Bitcoin collective delusion – with hackers alleged to have stolen Bitcoin valued at over $390 million from the world’s largest Bitcoin exchange, BloombergView’s Barry Ritholtz muses on the “collective delusion” of currencies, including the open-source, peer-to-peer traded currency, Bitcoin. (26 Feb 2014)
  • World’s first Bitcoin ATM opened in Vancouver (CBCNews, with Video, 29 Oct 2013)

The Bernard Madoff ex-employees trial

  • Second Madoff aide testifies at trial, denies knowledge of fraud. Madoff’s ex-assistant Annette Bongiorno testified that she had no idea her boss was operating a vast Ponzi scheme. Never suspected there was anything wrong with recording backdated trades, often months after the fact. She testified Madoff was a generous employer who gave her a honeymoon trip when she married, and helped her get a nursing home space when her mother had a stroke. (Reuters News, 24 Feb 2014)
  • Madoff Ex-Aide on Trial Cries, Telling Jury of His Curses. Annette Bongiorno cried when she told the jury of Madoff’s fury when she told him she wanted to retire in the mid-1990s. After their disagreement, she agreed to stay and thereafter alternated working 2 weeks, and living in Florida 2 weeks, commuting to work by train. She was paid for the time off in Florida as a “perk”, and kept in touch during her time off. Defense counsel Roland Riopelle says Madoff was desperate to keep Bongiorno, whose ignorance of how the industry worked and willingness to follow orders were critical to the scam; while prosecutors allege Bongiorno is pretending ignorance to avoid a lengthy sentence. All four employees are saying that Madoff deliberately sought out inexperienced employees he could train in his own way. (Bloomberg, 25 Feb 2014)

Other Fraud News

  • Shubenacadie Band forensic audit goes to RCMP, who will investigate the more than $800,000 in questionable payments made to band’s prior financial manager and a councillor. With RCMP investigating, Chief Rufas Copage says, “This way there is no political interference.” (CBCNews, 25 Feb 2014)

Do you have a news, court or regulatory body information on an interesting fraud case?   Comment on this posting or Tweet @fighting_fraud to share your Web links of publicly available fraud news and case information.

Vanessa G. Oltmann
Education and integrity – the best weapons against fraud and corruption

Author: V. G. Oltmann

V. G. Oltmann, MBA, CPA, CGA, CFI - Professor, Vancouver Island University 2002 - 2013 - Board Member, Association of Certified Forensic Investigators of Canada (ACFI): 2010-2013 - LinkedIn Profile:

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